Eligible small-business owners now have “more options” to refinance eligible fixed assets and business expenses through the U.S. Small Business Administration’s (SBA) 504 refinance program.
SBA Administrator Maria Contreras-Sweet “made the program permanent” through an interim final rule in the Federal Registerreleased May 26, the agency said in a news release issued Tuesday.
The change will help small-business owners “ease” their financial burdens and create “incentives” for potential expansion and further job creation, the agency contends.
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“As both a former small business owner and a banker, I know firsthand that access to capital is the single most important factor in the survival and growth of a small business. The 504-loan program with its long term fixed-rate can help refinance debt from adjustable-rate loans with significant savings to borrowers. Paying off existing loans with a new loan at a lower cost can help increase cash flow, which can be especially helpful in a resurgent economy. That’s why I’m so proud to announce this Final Rule making 504 Refi permanent,” Contreras-Sweet said in the SBA release.
Congress last December passed the Consolidated Appropriations Act of 2016, which made the 504 debt-refinancing program a permanent part of the SBA’s 504 loan program.
The 504 refinance program was originally a temporary measure under the Small Business Jobs Act of 2010.
The temporary debt-refinance program expired on Sept. 27, 2012, according to the SBA.
“For some time now, we’ve been making the case for the 504 refinance program with lawmakers, and now small businesses will have access to $7.5 billion under this program. Congress heard the combined voices of small business, lenders and SBA, and made the 504 refinance program permanent … a measure that I’m sure will prove essential in helping small business expand and strengthen the nation’s economy,” Contreras-Sweet added.
As outlined in the interim final rule announcement, SBA will begin accepting applications from small-business owners effective June 24.
It also marks the start of a public-comment period allowing the public to make recommendations that the SBA will review for “further program enhancements in the future.”
The public-comment period ends July 25, according to the SBA.
SBA is authorized to approve up to $7.5 billion for the regular 504-loan program and $7.5 billion in lending authority under the 504 debt-refinancing program, which brings the total 504 lending combined authorization to $15 billion.
The 504 debt-refinancing program is authorized to operate only in fiscal years “during which the subsidy costs to the government are zero,” the SBA said.
Contact Reinhardt at ereinhardt@cnybj.com
